PNE WIND AG ANNUAL REPORT 2012 Tail wind from the sea At a glance Summary profile • PNE WIND AG with registered office in Cuxhaven plans and realises wind farm projects both on the high seas (offshore) as well as on land (onshore) • Core competence: development, projecting, realisation and financing of wind farms as well as their operation and sale with subsequent technical and commercial management • Focus in 2012 on the further development of offshore projects as well as onshore projects in Germany and abroad • Since its establishment in 1995 construction of 98 onshore wind farms with 568 wind power turbines (total nominal output 814 MW), of which three successful repowering projects • Outlook in Germany: conclusions of onshore and offshore projects • International outlook: greater expansion into selected target markets and development of corporate structure abroad • Consolidation of position as one of the most experienced wind farm projectors PNE WIND AG Consolidated key data In million EUR 2012 2011 2010 Total aggregate output 94.3 53.9 80.0 Revenues 84.4 48.6 65.6 Earnings before interest and taxes (EBIT) 20.4 0.1 9.5 Earnings before taxes (EBT) 15.1 -4.9 5.4 Consolidated net income 17.0 -3.9 7.9 Equity 86.6 74.7 81.7 Equity ratio (in %) 47.5 38.8 40.8 Balance sheet total 182.5 192.3 200.2 Stock market data WKN A0JBPG ISIN DE000A0JBPG2 Number of shares 45,785,889 Market capitalisation as at December 31, 2011 € 102.6 million Free Float 96.94 % Market segment Prime Standard Indices CDAX Technology, ÖkoDAX Designated Sponsors Commerzbank, VEM Aktienbank, Close Brothers Seydler Bank Reuters PNEGn Bloomberg PNE3 Index 3 PNE WIND AG at a glance 69 Consolidated financial statements 4 Foreword 6 Report of the Supervisory Board 71 Consolidated statement of 10 Board of Management, Division comprehensive income Manager and Supervisory Board 72 Consolidated statement of financial 12 Portrait of PNE WIND AG position 20 Capital market information 74 Consolidated statement of cash flows 75 Consolidated statement of changes in equity 25 Combined management and 76 Consolidated schedule of fixed assets Group management report 80 Consolidated segment reporting 26 Market / general economic conditions 82 List of the companies included in the consolidated financial statements and 29 General political conditions list of shareholdings 31 Corporate structure 84 Notes to the consolidated financial 32 Organisation and employees statements 33 Summary of business activity 132 Auditors‘ Report 37 Revenues and earnings situation 133 Statement made by the legal 39 Financial situation / liquidity representatives 40 Situation of statement of financial position 135 Financial statements of the AG 44 Transactions with closely related companies and persons 137 Profit and loss account 44 Sales and marketing 138 Balance sheet 45 Development and innovation 140 Statement of cash flows 45 Major events subsequent to the period 141 Development of shareholders‘ equity under report 142 Schedule of fixed assets 45 Intangible assets 144 Schedule of liabilities 47 Report of opportunities and risks 146 Auditors‘ Report 51 Description of the key characteristics of ICS / RMS of the parent company and 147 Statement made by the legal the total Group representatives 54 Management declaration 60 Supplementary information 149 Glossary 63 Remuneration report 64 Outlook 152 Imprint We proudly look back on a “successful financial year 2012, where we have decisively developed our business onshore and offshore at home and abroad. “PNE WIND AG, Board of Management PNE WIND AG at a glance 4 Foreword 6 Report of the Supervisory Board 10 Board of Management, Division Manager and Supervisory Board 12 Portrait of PNE WIND AG 20 Capital market information PNE Wind AG close-up Capital market information Group management report Consolidated financial statements Financial statements of the AG Forword delivery of a construction site report, we expect to receive an additional euro 75 million from this sale. Apart from the milestones already received, the issuance of the permit for the “Gode Wind” III project by the Federal Office for Shipping and Hydrographics (BSH) and subsequent transfer of the shares to DONG Energy will trigger an additional payment. Furthermore when DONG Energy reaches the final investment decisions Martin Billhardt, Chairman of the Board of Management for the “Gode Wind” I and II wind farms further milestones will become due. For the five year period following the sale of the “Gode Wind” Dear Shareholders, projects, PNE WIND AG will support DONG Energy in the realisation of the projects as a We look back on a very successful and eventful service provider. The service contract amounts year. We closed the period under report with a to at least euro 5 million and is budgeted for group consolidated earnings per share in the euro 8.5 million. With this sales transaction, we amount of euro 0.37. This is a success which have substantially strengthened the financial we wish to share with you, our shareholders. basis of our Company for the future. For this reason, we are proposing to the Annual General Meeting of shareholders a dividend Tailwinds are not only being felt offshore but distribution of euro 0.08 per share as well as a also in our onshore operations. In addition special dividend of euro 0.02 per share. to the successfully concluded “Kemberg II” repowering project, the “Zernitz II” wind farm In 2012, our offshore division contributed in Germany with 6 MW is nearing completion. a special portion of our business success. Additional projects, in particular in Germany Since 1999, we have been developing offshore and in the United Kingdom, will follow shortly. wind farm projects and this concentrated and pioneering undertaking, paid off with the sale of There is also movement in our large development the “Gode Wind” I, II and III offshore wind farm backlog extending over several countries: At the projects to the Danish DONG Energy A / S in moment our team is putting together a portfolio August 2012. Having now acquired five projects of wind farms with approximately 180 MW of from us, DONG Energy has emphasised its nominal output. confidence in PNE WIND AGs expert knowledge We have an excellent position in the wind market and ability to develop complex offshore wind with our well balanced and comprehensive farm projects. pipeline of onshore and offshore projects, a view For the shares in our “Gode Wind” I and II which was confirmed to us once again during the project companies as well as costs incurred by past year in discussions with power suppliers, us during the course of the development, we insurers and financial investors. In Germany received the first payment of euro 57 million in alone, we are developing onshore wind farms 2012. Following a further milestone payment with approximately 1,100 MW of nominal output. received in January 2013 to the amount of In addition to these, we have a further 2,000 MW euro 25 million for the completion and on time in development abroad. Offshore, our three own 4 II PNE WIND PNE Wind AG close-up Capital market information Group management report Consolidated financial statements Financial statements of the AG projects “Nemo”, “Nautilus I” and “Jules Verne” In order to create additional options, we in the North Sea, each with approximately 80 instituted a share buyback programme in turbine per site, offer great potential. December 2012 with the intent to buy back up to 4,126,700 of our own shares via the stock Besides the many organic growth opportunities market. The shares may, in particular, be sold which we are presented with, we have in the through a placement with selected investors or meantime reached a size where acquisitions may used as capital in a potential acquisition. offer substantial value creating opportunities. In this respect we are investigating several During the fiscal year 2012, the positive options, but always subject to the prerequisite developments are reflected in our results and we that they would generate a real benefit for our achieved sales of approximately euro 84.4 million Company. Such an acquisition could be financed and earnings before interest and taxes (EBIT) from our financial structure which has been in the amount of euro 20.4 million. This clearly strengthened from our past performance, or by illustrates the qualities of our business model: taking an additional step onto the bond markets. through the sale of the project rights in the “Gode Wind” family we have earned substantial In this regard, PNE WIND AG intends to issue profits. a corporate bond in the first half of 2013 amounting to euro 100 million on the Prime As a result of our proven success, we confirm Standard segment of the Deutsche Börse our cumulative EBIT guidance of euro 60 to (German Stock Exchange). PNE WIND AG 72 million for the three fiscal years 2011 to intends to use the proceeds to fund both organic 2013. On the basis of our well-filled pipeline and inorganic future growth. To this extent, and high earnings expectations arising from the planned issuance of the corporate bond our in the future work, we forecast for the is in connection with exclusive talks, which next two following fiscal years 2014 and 2015 a PNE WIND AG is currently conducting, for the cumulative EBIT of euro 60 to 72 million. possible acquisition of over 50 % of the shares We would like to thank you, also on behalf of our in a company. The target company is primarily employees, for all of your support and hope that active in the development of onshore wind you will accompany us on our exciting path in farms in Germany and abroad. The initial price the future.